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Testing the future of emergency assistance

Nepal, June 27, 2013

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We're testing a new system of emergency assistance in Nepal. Recipients receive virtual vouchers via SMS message on mobile phones that can be used like cash at participating local stores. Photo: Suraj Shakya for Mercy Corps

Santu Maya, 72, in the crowded Kathmandu home she shares with eight other family members. She received two vouchers worth about $30 USD to buy basic food staples like lentils, rice and oil. Photo: Suraj Shakya for Mercy Corps

Prominent signs identify the vendors who are participating in the program so recipients know where to use their mobile vouchers. Photo: Suraj Shakya for Mercy Corps

Those who don't own a cell phone receive a voucher number, which is redeemed on the merchant's smart phone app. Photo: Suraj Shakya for Mercy Corps

Educational tools like this poster and training sessions are designed to make it easy for elderly or illiterate participants like Santu Maya to understand and use the system. Photo: Suraj Shakya

Santu Maya still needed help from family members the first time she used her mobile vouchers, but she was grateful for the chance to learn. "This is the first time I've done anything like this before. You need to continue program — there are many needy people."

A quiet revolution is underway to streamline the delivery of assistance to people in crisis — using the most prolific technology in the world. The reach of mobile devices has grown exponentially in recent years — it’s estimated that of the world’s seven billion people, six billion have access to a mobile phone — presenting an incredible opportunity to consider new solutions to traditional aid challenges.

We’ve been part of the mobile money revolution for some time, and now our latest efforts are being tested in Nepal — one of the poorest countries in the world.

Poverty runs rampant across Nepal, a country in transition after 10 years of conflict. The average Nepalese earns less than $1.30 a day and more than a quarter of the population survives below the poverty line. In addition, Nepal’s geographical location puts it at high risk of a major earthquake, especially in dense urban areas where the population has tripled in recent years.

Mobile vouchers are quicker, more secure way to transfer funds

This spring, we partnered with MasterCard Worldwide to pilot a mobile voucher distribution system here that efficiently delivers funds through data applications and SMS messages. In the event of a disaster in Nepal, the system would be able to quickly help those who have no other safety nets. During the pilot phase, the electronic vouchers seamlessly transfer money to be used for basic food staples like lentils, rice and oil, and supplies.

The program targets households in Kathmandu’s urban slum areas that largely rely on meager income from jobs such as garbage sorting or work in crude slaughterhouses to make a living. People like Santu Maya Shahi, a 72-year-old matriarch who moved to a modest home with eight other family members after a landslide destroyed her previous house. Only two of the adults have regular work, limiting the meager household income.

After attending a workshop to learn the process, Santu Maya registered her phone number and received two SMS vouchers worth 3,000 rupees (about $30 USD) that she could redeem at a local shop for anything she needed. Signs identify participating vendors, where beneficiaries show the SMS message on their phone with the amount of their voucher and expiration date.

The pilot is also testing smartphone vouchers that don’t require participants to own a phone — they simply bring their voucher number to the store, which is redeemed through the vendor’s smartphone application.

Santu Maya was one of several older participants who cannot read, making the learning process a challenge. She ended up relying on her family members to help her understand how to use the phone and redeem her SMS vouchers.

Still, Santu Maya is excited about the possibilities. “This is the first time I’ve done anything like this before. You need to continue this program – there are many needy people,” she said. “All my thanks for bringing this program here.”

Testing the system to make sure technology is accessible for all

Indeed, as we move forward and explore the use of mobile technology in relief work, one of the main challenges is making sure people are not excluded because of limited literacy or unfamiliarity with phones. MasterCard is helping us address this and identify options that are easiest for people to use.

Ultimately, this method of aid distribution is expected to be more cost-effective but, more importantly, it helps us reach people in crisis faster than the traditional mechanical distribution of physical paper vouchers. Just as important, digital aid delivery systems are one of the most transparent ways of making financial transfers and help root out leakages and corruption.

After the pilot test in Nepal, we plan to take the system to the Democratic Republic of Congo for another test before eventually making the system available globally, particularly in areas vulnerable to natural disaster and conflict. We know that providing urgent assistance in emergencies and quickly stimulating local micro-economies are key to creating resilient communities.